[Cite as Elyria v. Lorain Cty. Budget Comm., 128 Ohio St.3d 485, 2011-Ohio-1482.] 

CITY OF ELYRIA ET AL., APPELLANTS AND CROSS-APPELLEES, v. LORAIN 

COUNTY BUDGET COMMISSION ET AL., APPELLEES; COUNTY OF LORAIN,

APPELLEE AND CROSS-APPELLANT. 

[Cite as Elyria v. Lorain Cty. Budget Comm., 

128 Ohio St.3d 485, 2011-Ohio-1482.] 

Allocation of local government fund and local government assistance fund — R.C. 

5747.55(D) — BTA’s decision is reasonable and lawful — Decision 

affirmed. 

(No. 2010-0564 — Submitted January 19, 2011 — Decided April 5, 2011.) 

APPEAL from the Board of Tax Appeals, Nos. 2003-M-1533, 

2004-M-1166, and 2005-M-1301. 

__________________ 

O’DONNELL, J. 

{¶ 1} The cities of Elyria, Avon Lake, and North Ridgeville and the 

township of Amherst, appellants and cross-appellees here, again challenge 

appellee Lorain County Budget Commission’s apportionment of local government 

funds for the distribution years 2004, 2005, and 2006. In their first appeal, we 

reversed the BTA’s dismissal of their challenge for lack of jurisdiction and 

remanded for consideration of their case on the merits. See Elyria v. Lorain Cty. 

Budget Comm., 117 Ohio St.3d 403, 2008-Ohio-940, 884 N.E.2d 553. 

{¶ 2} This appeal and cross-appeal arise from a decision of the BTA 

following our remand and present two issues: first, whether reduction of the 

allocation of local government funds to Elyria, Avon Lake, North Ridgeville, and 

Amherst Township pursuant to the new alternative method of apportionment 

adopted for 2004, 2005, and 2006 is lawful because it arose as part of the 

settlement of an appeal of the 2002 apportionment brought by the city of Lorain, 
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when none of the political subdivisions here were parties to either that case or that 

settlement; and second, whether the BTA reasonably and lawfully disapproved of 

a special adjustment to the new alternative method of apportionment for 2004 

intended to reimburse the county for $250,000 of the $500,000 settlement 

payment it tendered to the city of Lorain to resolve the 2002 appeal. 

{¶ 3} Because the BTA acted reasonably and lawfully when it approved 

the new alternative method of apportionment formula for 2004, 2005, and 2006 

and when it found that the $250,000 special adjustment to the 2004 apportionment 

overallocated general revenue funds to Lorain County, we affirm the decision of 

the BTA. 

Facts and Procedural History 

{¶ 4} During the years at issue here, Ohio law provided for a portion of 

various state taxes to be placed in a local government fund and a local 

government revenue assistance fund, which the state distributed to county 

treasurers and credited to the Undivided Local Government Fund and the 

Undivided Local Government Revenue Assistance Fund of each county. See R.C. 

5747. 03(A)(1) and former R.C. 5747.61(B), 143 Ohio Laws, Part II, 2331, 2630-

2632. The county budget commission then apportioned these local government 

funds among the political subdivisions within the county. 

{¶ 5} The legislature provided that these funds be distributed either by a 

statutory method of apportionment pursuant to R.C. 5747.51 and former R.C. 

5747.62, 147 Ohio Laws, Part II, 3906, 3945-3947, or by an alternative method of 

apportionment pursuant to R.C. 5747.53 and former R.C. 5747.63, 149 Ohio 

Laws Part IV, 7881, 7887-7890, which involved adopting a formula for 

distribution of the funds to each subdivision. 

{¶ 6} From 1984 to 2003, the Lorain County Budget Commission 

applied an alternative method of distributing these funds to the political 

subdivisions in Lorain County. 
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{¶ 7} In November 2002, however, a month after the budget commission 

had allocated local government funds for 2003 in accordance with the existing 

alternative method, the city of Lorain appealed its distribution to the BTA, 

contending that the budget commission had allocated funds to an ineligible entity 

and that the alternative method of apportionment had not been adopted in 

accordance with statutory requirements. The appeal named 21 political 

subdivisions as appellees, but it did not name Lorain County, Elyria, Avon Lake, 

North Ridgeville, or Amherst Township as appellees. 

{¶ 8} Although not a party to the city’s appeal, in July 2003, Lorain 

County proposed a settlement to the mayor of Lorain whereby the county would 

make a one-time $500,000 payment to the city of Lorain that year, in addition to 

the 2003 distribution calculated by the 2002 methods, and a majority of the Lorain 

County political subdivisions would commit to adopting a new alternative method 

of allocating local government funds to the political subdivisions in Lorain 

County. This new alternative method would increase the share allocated to the 

city of Lorain in the 2004 distribution year by about $640,000 while decreasing 

the share received by other political subdivisions, reducing Elyria’s share to 10.05 

percent from 10.59, reducing Avon Lake’s share to 2.67 percent from 2.82, 

reducing North Ridgeville’s share to 3.25 percent from 3.42, and reducing 

Amherst Township’s share to 0.48 percent from 0.51. That settlement also 

provided for a special adjustment in the 2004 distribution to reimburse Lorain 

County $250,000 of its $500,000 settlement payment made to the city of Lorain to 

resolve the 2002 appeal. This $250,000 “carve out” would further reduce the 

amount allotted to Elyria, Avon Lake, North Ridgeville, and Amherst Township. 

{¶ 9} The city of Lorain and a majority of the other political subdivisions 

in the county adopted the new alternative method in September 2003. When the 

matter came before the Board of County Commissioners of Lorain County for 

approval, the law director for the city of Elyria, the mayor of North Ridgeville, 
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and a representative of the trustees for Amherst Township appeared and objected, 

asserting that their political subdivisions had not been made parties to the 

settlement and therefore should not be bound by it. The commission also received 

a letter from the Amherst Township trustees and an e-mail from the mayor of 

Avon Lake, each objecting on similar grounds. Despite these objections, the 

commissioners approved the new alternative method. 

{¶ 10} On September 24, 2003, the Lorain County Budget Commission 

approved and adopted the new alternative method, and the BTA subsequently 

dismissed the city of Lorain’s appeal. 

{¶ 11} Elyria, Avon Lake, North Ridgeville, and Amherst Township 

appealed to the BTA, challenging their reduced share of the local government 

funds for distribution years 2004, 2005, and 2006. The BTA dismissed the appeal 

for each distribution year due to lack of jurisdiction, finding that the four political 

subdivisions had failed to comply with R.C. 5747.55(C)(3) by not identifying the 

city of Lorain in their notice of appeal as receiving more than its proper share of 

the allocation. 

{¶ 12} In their initial appeal to this court, we reversed the decision of the 

BTA and held that while these political subdivisions were obligated to comply 

with R.C. 5747.55(C)(3) to maintain their appeal, they had asserted a claim that 

justified naming the county as the only overallocated subdivision, so that the BTA 

had jurisdiction to determine the merits of their claim. Elyria v. Lorain Cty. 

Budget Comm., 117 Ohio St. 3d 403, 2008-Ohio-940, 884 N.E.2d 553, ¶ 24. 

{¶ 13} Following our remand, Elyria, Avon Lake, North Ridgeville, and 

Amherst Township withdrew their claim that the new alternative method had not 

been adopted in the manner prescribed by statute but continued to object that they 

were not parties to the settlement. The BTA concluded that the new alternative 

method of apportionment could be applied to these political subdivisions even 

though they had not been made parties to the settlement of the prior appeal. 
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5

Elyria v. Lorain Cty. Budget Comm. (Mar. 2, 2010), BTA Nos. 2003-M-1533, 

2004-M-1166 and 2005-M-1301, 2010 WL 751773, *5. However, it found that 

the $250,000 adjustment for distribution year 2004 intended to reimburse the 

county for half its 2003 settlement payment to the city of Lorain could not be 

applied to the four political subdivisions because the “$250,000 is traceable to the 

2003-allocation settlement,” and the BTA therefore modified the 2004 

apportionment to the extent that the carve-out applied to them. Id. at *6. 

Positions of the Parties 

{¶ 14} In their second appeal to this court, Elyria, Avon Lake, North 

Ridgeville, and Amherst Township maintain that the restrictive language in R.C. 

5747.55(D), which provides that “no change shall, in any amount, be made in the 

amount allocated to participating subdivisions not appellees,” bars the application 

of the new alternative method to reduce their shares of local government funds for 

distribution years 2004, 2005, and 2006, because the alternative method resulted 

from the settlement of the earlier appeal to which they were not named as parties. 

Further, they assert that the percentage of Lorain County inhabitants residing 

within municipal corporations exceeded 81 percent in 2005, and pursuant to R.C. 

5747.51(H) and 5747.53(E), this shift should have limited the percentage of local 

government funds allocated to the county to 30 percent, rather than the 48.30 

percent allocation it received in the 2006 distribution. Elyria, Avon Lake, North 

Ridgeville, and Amherst Township therefore request that the excess allocation to 

the county be redistributed to the other political subdivisions. 

{¶ 15} The county, on the other hand, contends that the BTA lacks 

authority to grant the relief sought by the four political subdivisions because the 

statutes do not permit a “hybrid allocation” to reinstate the pre-2004 allocations to 

the four political subdivisions and reduce the share to the county, while also 

maintaining the allocations that other political subdivisions received pursuant to 

the alternative method adopted for 2004, 2005, and 2006. It further argues that 
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R.C. 5747.55(D) does not apply to this appeal, urging that while this statute may 

prevent a reduction in the apportionment for 2003, it does not override the new 

apportionment method adopted for subsequent years. The city of Lorain largely 

joins this argument. 

{¶ 16} Lorain County cross-appeals, suggesting that the notice of appeal 

to the BTA does not mention or specifically seek relief as to the carve-out, and it 

also asserts that the BTA erred in characterizing a portion of the 2004 allocation 

— the $250,000 special adjustment — as a reallocation of funds that had been the 

subject of a prior appeal, because the four political subdivisions’ 2003 allocation 

could not be reduced by an alternative method of apportionment allocating local 

government funds for subsequent years. Thus, the county maintains that the BTA 

created a new method of apportioning local government funds not authorized by 

statute. 

{¶ 17} The four political subdivisions maintain that the BTA had 

authority pursuant to R.C. 5747.55(E) to eliminate the carve-out from the 2004 

apportionment, because it reduced their share of local government funds as the 

result of an appeal to which they were not made parties, in violation of R.C. 

5747.55(D). 

Law and Analysis 

{¶ 18} Pursuant to R.C. 5747.53(G) and former R.C. 5747.63(G), 149 

Ohio Laws, Part IV, 7881, 7890, the BTA reviews the budget commission’s 

actions in adopting the alternative formula for an abuse of discretion. However, 

our review is more limited. As we explained in E. Liverpool v. Columbiana Cty. 

Budget Comm. (2000), 90 Ohio St.3d 269, 271, 737 N.E.2d 44, “[w]e are 

confined to our statutorily delineated duty of determining whether the BTA's 

decision is reasonable and lawful.” 

{¶ 19} With an exception not relevant here, R.C. 5747.53(B) and former 

R.C. 5747.63(B), 149 Ohio Laws, Part IV, 7881, 7888, authorized the county 
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budget commission to adopt an alternative method of apportioning local 

government funds, requiring only that the board of county commissioners, the 

legislative authority of the county’s city with the greatest population, and a 

majority of the remaining political subdivisions in the county first approve it. As 

we explained in E. Liverpool v. Columbiana Cty. Budget Comm., 105 Ohio St.3d 

410, 2005-Ohio-2283, 827 N.E.2d 310, ¶ 10, “[t]he alternative method under R.C. 

5747.53 and [former] 5747.63 * * * does not require the budget commission to 

afford political subdivisions an opportunity to be heard under oath before 

allocating ULGF and ULGRAF dollars, because those statutes only require the 

county board of commissioners and the appropriate political subdivisions to 

approve the alternative formula before it is adopted by the budget commission. 

Accordingly, when the commission and the county's political subdivisions have 

already approved an alternative formula, the statutes do not require the 

commission to provide a hearing prior to adopting an alternative formula.” 

{¶ 20} Elyria, Avon Lake, North Ridgeville, and Amherst Township do 

not dispute that the county budget commission complied with the applicable 

statutory procedures in adopting the new alternative method of apportionment, 

admitting that any contrary argument is jurisdictionally barred. Further, the 

record reflects that the four political subdivisions had notice and an opportunity to 

be heard before the budget commission adopted the new alternative method. In 

accordance with law, the board of county commissioners, the county’s city with 

the greatest population, and a majority of the remaining political subdivisions in 

the county approved the new alternative method before the budget commission 

adopted it. Elyria, Avon Lake, North Ridgeville, and Amherst Township were 

outvoted, and the budget commission adopted the new alternative method. 

{¶ 21} R.C. 5747.55(D), however, states that “no change shall, in any 

amount, be made in the amount allocated to participating subdivisions not 

appellees” to the appeal of a county budget commission apportionment. When 
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the city of Lorain appealed the 2002 apportionment of local government funds, 

the appeal could not affect the share of any political subdivision for distribution 

year 2003 not named as a party, but could reduce the shares only of the political 

subdivisions indentified in the notice of appeal as receiving more than their proper 

shares. See R.C. 5747.55(C)(3) and (D). 

{¶ 22} The new alternative method adopted by the county budget 

commission, which prescribes the percentage share of local government funds 

allocated to each political subdivision, applies prospectively for 2004, 2005, and 

2006. While the idea for a new alternative method may have arisen during 

negotiations to settle the city of Lorain’s appeal, the settlement did not itself 

reduce the shares of the 2002 apportionment allocated in 2003 to Elyria, Avon 

Lake, North Ridgeville, and Amherst Township. Rather, it was the county budget 

commission’s adoption of the new alternative method in accordance with R.C. 

5747.53(B) and former R.C. 5747.63(B) that reduced the percentage of local 

government funds that the four political subdivisions received. R.C. 5747.53(D) 

and former R.C. 5747.63(D), 149 Ohio Laws, Part IV, 7881, 7890, vested the 

county budget commission with discretion to include “any factor” it considered 

appropriate and reliable in apportioning local government funds, and the four 

political subdivisions have not demonstrated that the budget commission abused 

its discretion in determining their percentage shares of those funds. 

{¶ 23} In contrast, the parties to the 2003 appeal explicitly intended the 

$250,000 special adjustment to the new alternative method of apportionment for 

2004 to reimburse the county for part of the payment it made to the city of Lorain 

to settle the appeal. This carve-out is directly traceable to the settlement, and 

because Elyria, Avon Lake, North Ridgeville, and Amherst Township were not 

parties to it, their shares could not be reduced to offset money tendered to settle 

the appeal. The county budget commission therefore abused its discretion in 

reducing the amount allocated to these four political subdivisions based on the 
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2003 settlement payment of $250,000, and the BTA reasonably and lawfully 

modified the 2004 apportionment to the extent that the special adjustment had 

been applied to them. 

{¶ 24} Finally, while the four political subdivisions contend that the BTA 

should have considered their argument that the county received more than its 

proper share of the 2006 distribution because the municipal population of Lorain 

County had surpassed 81 percent of the total population, they failed to raise this 

issue in their initial merit brief on remand from this court and waited until their 

reply brief to present this issue to the BTA. As we explained in HealthSouth 

Corp. v. Levin, 121 Ohio St.3d 282, 2009-Ohio-584, 903 N.E.2d 1179, “the 

omission of an argument from a party's brief may be deemed to waive that 

argument,” and the BTA therefore did not commit reversible error when it 

declined to address this belated argument. Id. at ¶ 18, fn. 2, citing E. Liverpool v. 

Columbiana Cty. Budget Comm., 116 Ohio St.3d 1201, 2007-Ohio-5505, 876 

N.E.2d 575, ¶ 3; see also State ex rel. Grounds v. Hocking Cty. Bd. of Elections, 

117 Ohio St.3d 116, 2008-Ohio-566, 881 N.E.2d 1252, ¶ 24 (tribunal need not 

address an argument raised for the first time in a reply brief).

Conclusion 

{¶ 25} Ohio law authorized the county budget commission to adopt an 

alternative method of apportionment of local government funds provided that the 

board of county commissioners, the legislative authority of that county’s city with 

the greatest population, and a majority of the remaining political subdivisions in 

the county first approved it. The BTA determined that the statutory requirements 

were met, and the record supports that determination. Accordingly, the BTA 

reasonably and lawfully approved the alternative method of apportioning local 

government funds prescribing the percentage share for each political subdivision 

for distribution years 2004, 2005, and 2006. 
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{¶ 26} However, a special adjustment to the method of apportionment for 

one year intended to offset money tendered to settle the appeal of a prior year’s 

apportionment may not be applied to political subdivisions that were not parties to 

the appeal. In accord with this precept, the BTA reasonably and lawfully found 

that the $250,000 carve-out at issue in this case could not be applied against the 

shares of local government funds allocated to Elyria, Avon Lake, North 

Ridgeville, and Amherst Township in 2004. 

{¶ 27} For these reasons, on the appeal, we affirm the decision of the 

BTA to uphold the new alternative method adopted for distribution years 2004, 

2005, 2006. Furthermore, on the county’s cross-appeal, we affirm the decision of 

the BTA to eliminate for these appellants and cross-appellees the $250,000 

adjustment applied against them in 2004. 

Decision affirmed. 

 O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, LANZINGER, CUPP, 

and MCGEE BROWN, JJ., concur. 

__________________ 

 Terry S. Shilling and Michelle D. Nedwick, Elyria Law Director, for 

appellants and cross-appellees city of Elyria and Amherst Township. 

 Zagrans Law Firm, L.L.C., and Eric H. Zagrans, for appellant and crossappellee city of North Ridgeville. 

 William J. Kerner Sr., for appellant and cross-appellee city of Avon Lake. 

 Thompson Hine, L.L.P., John T. Sunderland, and John B. Kopf, for 

appellees and cross-appellants Lorain County and Lorain County Board of County 

Commissioners. 

 John R. Varanese, for appellee city of Lorain. 

______________________